If the Economy Enters a Recession

question 42

Multiple Choice

If the economy enters a recession

• A) frictional unemployment increases.
• B) structural unemployment decreases.
• C) cyclical unemployment increases.
• D) the number of workers on layoff decreases.

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Definitions:

Unamortized Discount

The portion of a bond discount that has not yet been charged to expense because the bond has not reached its maturity.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.

Callable Bonds

A type of financial instrument that allows the issuer to buy them back prior to the expiration date, for a pre-determined price.

Bond Indenture

A legal contract specifying the terms and conditions under which a bond is issued, including interest payments and repayment at maturity.